On this episode of the Futurum Tech Webcast – Interview Series I am joined by Poly CEO Dave Shull.
My conversation with Dave revolved around the following:
- Poly’s latest quarterly results and 2022 outlook as we emerge from the pandemic
- How the Delta variant may complicate companies’ return to work plans and how collaboration tech needs to evolve as we enter a new era of hybrid work
- The need for meeting equality to ensure same virtual meeting experience for those in the room and those who aren’t
- Poly’s recent cross-border effort in Baja Mexico to vaccinate 5,000+ maquiladora workers and their family members
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Daniel Newman: Hey everybody, Daniel Newman here, principal analyst and founding partner at Futurum Research. We’re back for another episode of Futurum Tech TV. I am excited to have a conversation today, bringing back Mr. Dave Shull, Poly CEO, to chat with me a little bit following earnings and about some other happenings that are going on over at Poly.
Dave, great to see you again.
Dave Shull: Thanks, Daniel. Good to be here again.
Daniel Newman: It’s been a long week. I think I told you backstage, but I think it’d be fun for everybody to hear this, made my first transatlantic trip this past week since COVID and that couch behind you, I’m not going to lie, is looking very comfortable. You forget. We got into really good practice. I travel 48 weeks a year. Poly, by the way, you guys are busy trying to save me from that with the technology you guys build. But I forgot about jet lag. I legitimately forgot how bad jet lag is.
Dave Shull: You need some comfy headphones with music and you just kind of vibe out, that’s the only way to get over jet lag.
Daniel Newman: When you do it all the time, though, you’re traveling all the time, when you’re going in and out of time zones, you really do almost start to acclimate to the pain and you just deal.
Dave Shull: Absolutely. Absolutely.
Daniel Newman: But after a year and a half of very little travel, I’m now on day three, I returned on midnight on Tuesday night, Wednesday was a disaster, Thursday was like I was having vertigo all day, and today I finally feel somewhat normal again.
Dave Shull: Well, welcome back to America. We’re glad to have you back in our time zone.
Daniel Newman: Thank you, my friend. I just wanted you to say that. That was all I was working towards.
Dave Shull: See, when I did my international travel this week, Daniel, I went down to Tijuana, Mexico to visit our factory. No time zone changes. It was easy. You’ve got to go north and south.
Daniel Newman: I’ve done that sometimes. The only issue you can run into is weather when you do the north and south stuff. Not necessarily going to Mexico, but I’ve done some stuff in Santiago, Chile, where you literally go down there and you’re in the middle of summer and you’re like, why is it snowing here? [crosstalk]. You’re not used to actually you don’t flip time zones, you flip seasons.
Dave Shull: That’s right. That’s right.
Daniel Newman: So that’s another fun thing. We’ll have to get back to that at some point in the next, I don’t know, five, 10 years after the omega variant, or whatever, the zeta variant.
Dave Shull: Oh man, let’s be optimistic here. Epsilon, and then we’re done, we hope, right?
Daniel Newman: It’s like hurricane season. Now we’re going to just have a whole practice of naming storms and variants.
Dave Shull: You know, I spent three years at the Weather Channel, that was always part of the fun is picking the names for the new hurricane season. That was the best part of the job.
Daniel Newman: I’ll have to have a talk with you offline about media sensationalizing pain and suffering of a one-inch rainstorm. But I do understand we need people to watch and pay attention. So speaking of watching and paying attention, a lot of eyes on Poly over the last few quarters. You guys saw quite an emergence. I still remember your last appearance on CNBC, did a great job. We saw the share price really grow as started to get more confidence behind the growth of the company, especially in the higher-margin video products. A few quarters into the seat now, talk a little bit about your latest earnings and just how you’re feeling about the company now that you’re emerging, or that we are hopefully emerging, from the COVID-19 pandemic.
Dave Shull: I think what’s encouraging me is that we’re still seeing substantial year-over-year growth. Now, our June quarter of last year was tough because it was the first quarter really of full-on COVID, so we are seeing a reemergence from where we were a year ago. We’re still seeing massive growth in the video space year-over-year, which is also very, very encouraging. So I think that’s all great news. The demand remains very strong. We’ve said publicly that we would have expected sequential quarter-over-quarter growth a couple of quarters in a row here based on demand, and so it’s really just an issue of supply chain that we’re trying to sort our way through.
Daniel Newman: Yeah. I mean, we’re all kind of seeing across the tech board, and I cover earnings of a lot of companies, semiconductors, of course, something we all watch very closely. One of the really interesting things, Dave, is we talk a lot and spend a lot of time on leading-edge, but a lot of the technology might be a USB interface or UCI interface and you’re talking about a lagging-edge 28-nanometer, 32-nanometer node. This is what’s holding up a lot of hardware products, services, vehicles. Because of the type of hardware you make, I’m sure some of that lagging-edge, we’re not talking three and five nanometer, we’re talking about something you could probably sell more units if there was more supply. I mean, is that kind of what you’re [crosstalk]?
Dave Shull: Oh, absolutely, we could sell many, many hundreds of thousands of units with a little bit more supply. But it’s been educational for me as well, understanding a little bit more of where our supply chain really overlaps with the automotive space. As you said, as some of the larger semiconductor geometries, which are some of the older geometries, and that’s where the automakers are overlapping, and so we’re doing everything we can to make sure that our designs going forward or in the newer geometries, which our newest products are. So it’s been an interesting balance in terms of cost of the chips versus availability here.
Daniel Newman: It’s crazy, six-figure SUV’s that can’t ship because of a 27 cent chip and so therefore can’t get the stereo option into the car. Yeah, you make a great point.
So we’ve made some back and forth here already about the pandemic and what’s going on and I used the term hopeful and we talked about emerge, but we also can’t turn on TV news right now without hearing about delta, return to work. But for Poly, that delay, we never want to look at this situation as the misfortune being anyone’s fortune, but we’ve obviously seen how much digital and technology have accelerated as a by-product of companies having to work around the misfortunes of the pandemic. Do you see this complicated return that is once again being slowed, whether that’s returning to office, returning to events, what is that kind of impact out there that you’re seeing right now and how does that impact Poly?
Dave Shull: I think it has two impacts. I think, first of all, it’s demonstrated to everyone that it’s going to be a hybrid world. That even if it’s not delta, it’s going to be something else. So we need to embrace that and not assume that it’s going to go back to normal. I think this stutter-step that we as a world have experienced with delta has kind of driven home that point, which is if it’s not delta, it’s going to be something else, and so we should always expect to have video calls every time we have a call and to always have someone in the room who’s down in a remote. That’s the way to take care of our teammates, that’s the way to take care of our partners, and that’s got to be kind of the right approach.
So from a technology point of view, that really kind of triples down on the need for equality in the conference room. Equality between those who are in the room and those who aren’t. So that’s issue number one, hybrid is, if anything, been reemphasized and reconfirmed by delta.
Number two is we have seen some delays on some video installations in certain countries that are a little bit uncertain about their return to office. We’ve had some delays from the states, but I’m really talking outside the U.S. where there’s been lower vaccination rates. So governments are trying to figure out, okay, what does that mean, is that a three-month delay, a six-month delay? So as a result, some companies are doing proof of concepts with our video gear, but they’re rethinking what they thought was going to be a September or October 100% back to the office is now being staggered over multiple quarters.
Given the supply issues, that’s probably a good thing for us right now. As you said, it’s definitely not something that we ever want to celebrate because I think it’s a tough thing for employees across all of our customers, but it does make for a more practical matching of what we see as the demand to the supply over the next couple quarters.
Daniel Newman: Yeah, absolutely. Now you mentioned something that I wanted to lean into just a little bit more with you, and that was kind of like the need for meeting quality to ensure the same virtual meeting experience. I don’t want to make sure I get that right. This has been something by the way that I think for years has created delays in the full buy-in on video solutions in the workplace. It’s just that people have been told, oh, you’re going to no longer need to travel. You can just do everything on video to truly feel immersive.
So there’s these pendulum swings. You pendulum in one way to what I think the market really stopped talking about but use to some extent which is telepresence, this massive, in some case, mid-multimillion dollar spaces that were supposed to feel like you’re sitting across the table. Now in the pandemic, we went to what I would say very rudimentary, but high volume, scalable web-based video to just get us eye contact, right? Just so we could see each other. But it is really in the end all about ubiquity. It’s all about basically the meeting quality shouldn’t suffer. The learning environment shouldn’t suffer.
I mean, is this achievable in a hybrid world? People everywhere. What’s the Poly view? How achievable is it really to create that uniform experience?
Dave Shull: I would say, first of all, I think recognizing the challenge is step number one, and recognizing that it’s not going to solve itself, which I think is perhaps a bit of the pre-COVID sort of mindset. So my challenge to our team is we’ve been around for decades, we’ve been doing this for many, many decades, we have a lot of experience in it, but let’s sit down now every time we have a hybrid meeting, which we’ve had a lot of recently, whether it’s my board meeting or whether it’s executive team meetings, every time we have a meeting, let’s make sure we’re really analyzing the experience for those in the room and those out of the room and really diagnosing what is making it not as good as all of us being in the same room.
One of the biggest changes that I think has occurred in the last year and a half has been that we’re all on the same plane, we all have more or less the same headspace, more or less the same presentation of our eyes and our body language, and that actually is really important to being able to read a room. So in a room that’s 30 feet long, what camera angles can we use? What camera intelligence can we put it into our devices to make sure that we’re solving that? How do we bring the whiteboard into that same plane as well? There’s electronic solutions. There’s physical solutions. There’s collaboration solutions. Honestly, none of them are very good. So what else can we do to improve that and make it much more viable?
So that’s number one. Number two, we’re all becoming real pros, whether it’s Zoom, or Teams, or StreamYard that we’re doing here, or Google, or RingCentral, or whatever else, but the fact that we’re having to switch back and forth among all these various interfaces is challenging. So what else can we as Poly do to help people make that as seamless as possible so that whatever kind of call I have on my device, I want to make sure that that is seamlessly interfacing with the hardware and being launched?
Daniel Newman: Yeah, I like that. It’s a little bit of what I remember WebRTC was trying to solve, doing video in the browser. You shouldn’t have to only work within a certain environment or have to always have an additional app or tool to use something. Of course, with platforms being everybody’s thing, the idea that let’s minimize things in the browser, let’s create this really feature-rich platform with connectors.
So that’s an opportunity that I’ve always seen for Poly is a third-party hardware approach that basically says whether your Zooming, WebExing, Teamsin’, RingCentraling StreamYarding, I’m going to name everything, the point is though is you just do it here. I think there is a demand for that. It’ll be interesting to see how significant that demand is to create that cross-platform accessibility.
Like I said, tech guys like us, tech folks, we all want to know about, we want to know how the sausage is made.
Dave Shull: Right. Right. No one else cares.
Daniel Newman: Most people want to eat them. Most people just want to eat them.
Dave Shull: That’s exactly right. We just want to make it easy. Yeah.
Daniel Newman: So making it easy is the thing. So I love to end the conversation on kind of a high note. We started, we talked a little bit about the pandemic. Well, one of the things that’s going to help us solve this pandemic is getting a portion of our population vaccinated.
Dave Shull: Right. Right.
Daniel Newman: I heard, read, you talked about Tijuana, but I believe it was in Baja the company made a cross-border effort to vaccinate about 5,000 workers and family members. A good warm-hearted moment. Tell me a little bit about what went on.
Dave Shull: Yeah. There’s a lot of bad news on the border between here and Mexico, obviously, but this was a real collaboration between both governments and Coca-Cola and Poly where the lead companies kind of stepped in to say, hey, we have thousands of workers on both sides, and from a Poly point of view, regardless of the international border that runs there, we’re all one team. So we wanted to take care of our teammates.
We had COVID spiking down in Tijuana, we had a little bit more difficulty finding access to the vaccines down there, and so we worked with governments on both sides and were able to bus thousands of employees and family members and some of our vendors up to the San Diego border there and provide vaccination.
So I was down in Tijuana earlier this week visiting our factory and seeing the factories, looking at some of the improvements that we’re making down there, and the warm reception was off the charts. I think people were very, very appreciative and it keeps everyone safer. Of course, in a factory setting, you’re working closely together, and so I think that’s really important to make sure we’re taking care of the team.
Daniel Newman: It’s great to hear. If we get 5,000 from every company or more at scale over the next few months, we’re building bridges here.
Dave Shull: We’re building bridges, and I guess I would say from an American worker point of view, it makes the goods that we all buy safer, cheaper, easier to get as well. So it really helps us all kind of around both sides.
Daniel Newman: Absolutely. Well, Dave Shull, CEO of Polly, thanks for taking a little time, giving me the scoop, following up on your earnings, talking a little bit about some of the things I’m sure thematically when you’re out talking to the press, talking to media analysts like our ourselves, and of course, things that I hope are strategically going on in the back rooms as you’re trying to figure out what’s next.
A lot of promise here. Big opportunity. The future work is certainly going to be hybrid and I think Polly, my perspective to the market is you guys have a role to play. I look forward to seeing how you make that role bigger and bigger and we’ll be watching.
Dave Shull: Thanks, Daniel. Always a pleasure. Appreciate it.
Daniel Newman: Thank you for joining us on this week’s Futurum Tech Podcast, the interview series. Please be sure to subscribe to us on iTunes and stay with us each and every week as we bring more interviews and more shows from our weekly Futurum Tech Podcast.